Editor

Good morning. Second acts are rare in business and perhaps even rarer in technology, where change is constant and disorder is routine. So it’s going to be interesting to see just how successful Microsoft will be as it continues to reinvent itself on a variety of levels. Recently, we have seen the company make a series of acquisitions–such as Yammer and Perceptive Pixel–that help position it for a world of social media, mobility, touch screens and the cloud.

It is undertaking another huge step in this process–and one of considerable interest to CIOs everywhere–with the upcoming release of the Windows 8 operating system. It is the fabric that holds all of these changes together, and the interface that presents them to the computing public. So far, the reviews are pretty good. CIO Journal’s Clint Boulton takes a look at how one new tablet, the Samsung Series 7, makes use of Windows 8. He likes it, albeit with a few caveats. While it’s a bit heavy as a replacement for an iPad, it might make a light weight alternative to your laptop. And for larger organizations, it’s relatively easy to deploy.

All of these changes reflect a world in which network architecture is changing, and business structures and markets are changing with them as a result. It has been said time and again that few companies that dominated one technological era manage to succeed in the next. If Microsoft can continue to successfully evolve, it will achieve something rare in the world of business, and provide the market and CIOs will choices that they badly need.

TECHNOLOGY NEWS

Yahoo rethinks Alibaba stake sale.Yahoo could reverse its May decision to return more than $4 billion to shareholders from selling part of its stake in Chinese Internet company Alibaba, a signal that new CEO Marissa Mayer may want to use the cash for other purposes, the WSJ’s Amir Efrati says. In a regulatory filing, Yahoo said it may change its prior decisions because Mayer is reviewing the company’s strategy. Mayer has told colleagues she is interested in hiring or acquiring new talent and products through acquisitions, among other things, and possibly investing in Yahoo’s advertising technology. Read the 10-Q here.

Zynga offers stock options after earnings miss.Zynga doled out equity grants to all full-time employees after an earnings shortfall caused a share-price decline that eroded the value of existing grants, Bloomberg reports. Chief Executive Officer Mark Pincus aims to prevent a stampede of talent after the stock plummeted 70% since the initial public offering in December.

Goldman Sachs programmer re-arrested. The former Goldman Sachs programmer who downloaded code from company computers has been re-arrested and charged with “unlawful use of secret scientific material” and “unlawful duplication of computer related material,” Wired’s Kim Zetter reports. Sergey Aleynikov was convicted in 2010 under an economic espionage law for stealing “hundreds of thousands of lines” of source code for software used for stock and commodities trades. He was released from prison in February after an appellate court ruling.

Touchscreens–and everything else–may get touchier. Researchers at Disney are working on a new computer interface that can modify the feel of any surface, Technology Review’s Michael Fitzpatrick reports. The technology eschews gloves or a force-feedback device for an electrical signal passed across the user’s body to create an electrostatic field. When touching a nearby object, such as a tablet screen, enveloped in the same field, an electrostatic force creates the sensation of texture. “Varying the properties of the signal, such as the shape, amplitude, and frequency, can provide a wide range of tactile sensations,” writes Fitzpatrick.

Nokia cuts ties to app developers. Nokia took another step toward Microsoft byselling off an in-house development unit, reports Bloomberg’s Adam Ewing. Nokia bought Qt technology in 2008 to provide developers tools to write apps for its Symbian and MeeGo devices. Nokia’s support for its homegrown operating systems slowed after the company announced in February 2011 that it would be making phones running Microsoft’s mobile operating system.

Google to pay $22.5 million in FTC deal. Google will pay $22.5 million to settle Federal Trade Commission charges it bypassed the privacy settings of customers using Apple‘s Safari browser. The agreement is the largest penalty levied on a company for violating an order, says the WSJ’s Jennifer Valentino-DeVries. Last year Google agreed to 20 years of audits.

New spyware found in the Middle East. Researchers have found new spyware bearing similar markings to the Flame malware discovered earlier this year infiltrating computers in Iran. The spyware, dubbed Gauss, steals information “but also has a mysterious payload that could be destructive against critical infrastructure,” Wired’s Kim Zetter reports. Gauss can also capture logins to online bank accounts. The malware has been found infecting at least 2,500 machines, most of them in Lebanon, according to security firm Kaspersky Lab.

H-P’s CEO in Australia to apologize.AllThingsD’s Arik Hesseldahl reports that H-P CEO Meg Whitman was recently in Australia to “smooth over relations” with a client, Commonwealth Bank, that experienced a service disruption after a software upgrade. The bank was a client of outsourcer EDS, the company acquired by H-P in 2008 and the reason behind H-P’s $8 billion write-down Tuesday of its enterprise services unit. H-P fired the unit head on Tuesday. “Meanwhile, Oracle and IBM are eagerly seeking to make sure that HP doesn’t win its business back,” Hesseldahl reports.

EVERYTHING ELSE YOU NEED TO KNOW

Goldman won’t face charges. The Justice Department won’t bring charges againstGoldman Sachs or any of its employees for financial fraud related to the mortgage crisis, the WSJ reports. Meanwhile, the SEC ended an investigation into a $1.3 billion subprime mortgage deal, taking no action. The move was an about-face for the commission, which notified the bank in February that it planned to pursue a civil action, DealBook says.

U.S. exports stay strong … but there’s trouble ahead. The U.S. trade deficit with other countries narrowed to $42.9 billion in June from $48 billion a month earlier, as imports fell and exports grew. Exports were strong almost everywhere except to Europe. And Europe’s waning demand for U.S. goods was more than countered by countries like China. The WSJ says the figures “indicate that the U.S. remains as yet unscathed by—but in the path of—an economic downdraft affecting the rest of the world.”

Dodd-Frank price tag rises.Politico’s Morning Money just posted a new Standard & Poor’s report on Dodd-Frank costs. “We estimate that the DFA could reduce pretax earnings for the eight large, complex banks by a total of $22 billion to $34 billion annually–higher than our prior estimate of $19.5 billion to $26 billion. The bulk of the higher projected costs reflects our view that regulators could take a more strict interpretation.”

WHAT YOUR CEO IS READING

Every week, CIO Journal offers a glimpse into the mind of the CEO, whose view of technology is shaped by stories in management journals, general interest magazines and, of course, in-flight publications.

The U.N. and the Internet: it’s complicated. In December the U.N.’s International Telecommunication Union, ITU, meets to rewrite regulations that opponents say could destroy the free nature of the Internet. Fear of U.N. meddling appears to have done the impossible: unite the White House and Congress – as well as civil liberties groups. Foreign Policy’s Rebecca MacKinnon says that while the existing domain names and global technology standards have “worked astonishingly well in managing the Internet’s exponential growth,” there actually remains room for a U.N. contribution, specifically in standing up for underrepresented users. “While it is clearly the wrong organization to coordinate Internet standards and regulations,” she writes, “the world body has played an essential function in establishing a human rights framework for Internet policymaking on a global scale.”

Going for gold in emerging markets. Emerging markets represent the “biggest growth opportunity in the history of capitalism,” the McKinsey Quarterly writes, with annual consumption estimated to hit $30 trillion by 2025. But meeting the needs of the rising consuming class in Brazil, China, and India involves more than just buying ad time on the local stations: “Winning consumers in these new high-growth markets requires a radical change in mind-set, capabilities, and allocation of resources.” Tapping into the Olympic spirit McKinsey compares success to a decathlon, requiring the mastery of 10 “crucial capabilities” ranging from locking in key stakeholder support, to controlling the route to market to focusing on key urban centers like Brazilian boomtown Parauapebaqs and Guangzhou, China. Ready, set, make some money!

Cyborg America. The Verge’s Ben Popper gives new meaning to embedded journalism when he lets a basement biohacker implant a tiny magnet in his fingertip. Popper reports on a “strange new world of basement body hackers” who offer magnet and RFID chip implants in preparation for a future where body enhancement via electronic or mechanical parts is routine. “The end game is my brain and spinal column in a jar, and a robot body out in the world doing my bidding,” one devotee says. Popper traces contemporary instances of cyborg-hood—robotic arms, eyeglasses, our cozy relationships with the smartphone—revealing that biohackers are onto something. “Someday this will be commercially feasible and Apple will design an implant which will sync with your phone,” another biohacker says. ”But that is not going to be for us. We like to open things up and break them.”

Deloitte Touche Tohmatsu Limited's fourth annual Millennial Survey reveals the business activities and outcomes members of Generation Y would prioritize if they held leadership positions. In highlighting millennials' priorities, the survey results draw attention to this generation's values and the themes large enterprises should speak to if they wish to attract and retain members of this rising workforce.